US Democratic Senators Want Crypto Guidance Revoked

In an open letter dated August 10, three Democratic Senators led by Sen. Elizabeth Warren from Massachusetts asked the acting Comptroller, Michael Hsu of the Currency, to revoke guidance allowing National banks to engage in cryptocurrency activities.

“We are concerned that the OCC’s actions on crypto may have exposed the banking system to unnecessary risk and ask that you withdraw existing interpretive letters that have permitted banks to engage in certain crypto-related activities,” the senators wrote.

Senator Warren, who is a member of the Senate Banking Committee, was backed by Sens. Dick Durbin from Illinois, Bernie Sanders from Vermont, and Sheldon Whitehouse from Rhode Island who has openly criticized the crypto industry 

The Senators in their letter claim that OCC has failed to deal with the challenges created by the crypto-related banking industry and to set up mitigation measures to protect banks and their customers.

Senators ask OCC to engage the Federal Reserve

The letter, which includes a series of questions on OCC-regulated banks’ crypto activities, also urges the controller to engage the Federal Reserve and Federal Deposit Insurance Corp to develop a ‘comprehensive approach’ that adequately protects consumers and the safety and soundness of the banking system.

The crypto guidance that has sparked rage from Senators includes the mention of several letters questioning how many banks were approved in the final year of the 45th President of the United States, Donald Trump. The Office of the Comptroller of the Currency was then led by Brian Brooks now a CEO in the crypto industry.

“Given the risks posed by cryptocurrencies to banks and their customers, we request that you withdraw OCC Interpretive Letters 1170, 1172, 1174, and 1179 and coordinate with the Federal Reserve and the Federal Deposit Insurance Corporation to develop a comprehensive approach that adequately protects consumers and the safety and soundness of the banking system,” the Senators said in a letter.

The letter comes hours after the Department of Labor released the consumer index report that bumped up the crypto markets, taking pressure off the Federal Reserve, with Biden vowing to push for the passage of the inflation reduction act that will stabilize the markets.

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